How Microsoft played the patent card, and failed

Judge Bo not impressed

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Analysis In rejecting Microsoft's appeal this week a European court has dealt a significant setback to Redmond's attempts to mount an attack on competitors based on intellectual property litigation.

The decision by Judge Bo Vesterdorf at the European Court of the First Instance reveals for the first time many of the legal arguments that were made behind closed doors this year. The parts that interest us here are the decision itself, which rejects the idea that communication protocols are any kind of "trade secret" [*], and the slightly astonishing admission from Microsoft itself that suing people for IP violations is bothersome, or in its lawyers' own words: "a particularly complicated and inefficient exercise." If we're to take the lawyers at their word (always a risky business), then what has so often been described as a patent war between Redmond and open source developers looks much more like a phony war. Put the two together, and we have a much clearer idea of Microsoft's strategy than we did twelve months ago. We'll begin by examining the basis for Microsoft's appeal, or technically, its "application for interim measures".

Microsoft argued that the communication protocols were protected by copyright under the Berne Convention. It also argued that communications protocols were covered by patents either granted, applied for, or that it intended to file before June next year. It specified three in particular, covering DFS, SMB and DCOM.

"The patent applications relate to Constraint Delegation and Active Directory Sites protocols," claimed Redmond's lawyers. If the protocols were disclosed, competition would suffer a chilling effect, they claimed.

"Competitors would have no reason to attempt to develop applications which did not use the patented methods," Microsoft argued. In a statement that sadly arrived too late for the panto season, the lawyers also argued that "Disclosure of those insights reveals knowledge that can never be erased from the memory of recipients." (Fester: "I've got a giant, mind-erasing magnetron - and it's aimed right at your head, Mr Torvalds!").

Disclosure would harm the reliability, security of Windows and slow down the pace of innovation at Redmond.

"The task of adding new functionalities and improving the performance, security and reliability of existing functionality would be made considerably more difficult if third party software programs were calling upon Windows functionality using what were formerly confidential protocols," claimed the lawyers.

But Judge Vesterdorf rejected all of the arguments. Microsoft's lawyers had misread the Berne Convention, inventing a "right of disclosure" that didn't exist in the treaty. "At most the right of disclosure is a moral right which cannot be licensed," he added. Microsoft had also misread the European Council's Directive 91/250, which is the bit of EU law that establishes computer software as literary works and defines the holders' rights. He bluntly rejected the claim that server-to-server interfaces would be disclosed, and that the protocol documentation represented an early stage design document.

Microsoft lawyers argued that the EU was forcing the company to disclosed "server to server" communications protocols for the first time, and that suing what it perceived as violators of its IP was not an option Redmond would choose. The Judge summarized their argument, thus -

"Admittedly following annulment of the Decision, Microsoft would be able to bring proceedings against third parties in order to prevent them from using the patented technology, but it would be a particularly complicated and inefficient exercise to attempt to ascertain whether or not Microsoft's technology was still being used, and products created in the meantime and incorporating Microsoft's inventions would probably remain in distribution channels and in the hands of customers."

As for patents, Vesterdorf noted that when it testified in January, only one patent was mentioned.

"The doubts expressed as to whether a developer of server software using the relevant protocols in order to communicate with Windows clients would infringe the claims in question are confirmed by Microsoft's behaviour towards Samba, an 'open source' product which implements certain Microsoft communication protocols that the Samba team have identified using reverse-engineering techniques.

"Samba appears to have incorporated SMB's 'opportunistic locking' as early as January 1998 … and DFS as early as April 2001. So far as the Commission is aware, Samba has never licensed the patents in question from MS and MS has never claimed that its patents were being infringed by the Samba group."

In other words, if Microsoft sincerely believed that its IP had been violated, it would have cried foul already. The fact that it hasn't, after several years, significantly weakened its argument. Now not every Judge in every courtroom in the world can be relied on to follow such logic, but the fact that an important judge in an important case did should cause some cheer in the open source community.

The Judge even felt it necessary to record a claim by the Free Software Foundation of Europe that found "… a number of incompatibilities deliberately introduced in pre-existing protocols and then altering them with the aim of prohibiting interoperability."

Summing up, Vesterdorf decided that that competition would be better served by documenting the protocols.

"There are significant possibilities for product differentiation which could enhance competition but which at present are neutralized by Microsoft's conduct."

The view from FOSS County

When the EU verdict was published in the spring, the joint lead on the Samba project, Jeremy Allison described it as divisive. Commercial companies could license the protocols, but no software libre developer ever could.

What did he think of the appeals verdict, we wondered?

"It's possibly good in that it might force Microsoft to document these interfaces. But if Microsoft is allowed to set it up in exactly the same way they set up the US settlement, then it's great for everyone except open source."

"Microsoft has bought off and paid off every competitor it has, except open source. Every single player they could buy out, they did. That leaves Real, and FOSS. And they can't buy us out, because you can't buy off a social movement."

"Under MCPP you get access to the protocols for five years; and you have to agree that it's covered by Microsoft patents and you're licensing the patents," he argued. "It's very hard to build products under those terms, which is why they’re there - they don't want people building products under those terms." ®

[*]Count the number of headlines this morning around the world containing the words "Microsoft" and "trade secrets". After we took our shoes and socks off, we had to stop counting. Own the language, and the battle's half won.